SPRINGFIELD, ILL. The Illinois Joint Committee on Administrative Rules, a legislative oversight committee, voted 8-to-4 Tuesday not to object to Governor George H. Ryans rules on predatory lending.
The rules require state-charted financial institutions, including banks, savings and loans, credit unions, and mortgage brokers, to report the number of loans they make for one-to-four family residences, how many are more than 90 days past due, and how many foreclosures are made on those loans.
Regulators will use those numbers to determine reasonable foreclosure rates and investigate institutions exceeding them. Institutions reporting high levels of default could be sanctioned if loans are determined to be predatory. These rules do not apply on purchase loans, but to loans such as refinancing, debt consolidation, and home improvement. They also will cap interest rates on loans.
Gov. Ryan proposed similar, emergency rules in December, but they were rescinded when bankers and regulators agreed to a voluntary reporting system for loan volume and default rates. The permanent rules are expected to take effect within 30 days after their publication in the Illinois Register.
